News & Publications

In Case You Missed It: Last Week in Allyn Tax News (April 4-8)

Did you know over 600 sales tax rate changes occurred on April 1st in these states…

Alaska, Alabama, Arkansas, Arizona, California, Kansas, Louisiana, Minnesota, Missouri, Nebraska, Ohio, Oklahoma, Texas, Utah, Washington, Wyoming combined have over 600 sales tax rate changes. These changes became effective April 1st, 2022.

 

Maryland: Purchases Made Relating to Exempt Organizations

Maryland Court of Appeals determined that a for-profit organization was not entitled to a refund of sales and use taxes it paid for purchases of cleaning supplies that the company used to perform services for its nonprofit hospital clients. The court determined that the for-profit company was not a reseller to the exempt organization, nor acting as an agent for the hospital.

 

Arkansas: Janitorial Services Deemed Taxable

A sales tax audit resulted in a sustained assessment against the taxpayer declaring the taxability of cleaning and janitorial work. Typically, services rendered are non-taxable for purposes of sales tax in various states. However, Arkansas law states that cleaning services (services to get rid of dirt, impurities, or extraneous matter) are taxable under the definition of janitorial services. Additionally, AK law does not allow a deduction for supply costs associated with the janitorial services, as the taxpayer attempted to claim.

 

Maryland to Exempt Sales and Use Tax on Diabetic Care Products

Beginning July 1st, 2022, Maryland will cease collection of sales tax on a litany of products necessary for diabetes care. Some of the items are already exempt from sales tax as medical equipment, but HB 1151 will explicitly state an exemption for these and other items used for treatment and care of diabetes. While the bill is expected to decrease state revenue by about $2.2 million in 2023, State Representative Alonzo T. Washington testified that the bill is a positive step toward making diabetes care affordable for Marylanders.
 

Arkansas 2022 Sales Tax Holiday

A sales tax holiday has been declared for Arkansas and will begin at 12:01 a.m. on Saturday, August 6, 2022, and end at 11:59 p.m. on Sunday, August 7, 2022. On this sales tax holiday, state and local taxes will not be collected on the sale of clothing or footwear with a sales price under $100, clothing accessories and equipment with a sales price under $50 an item or school supplies, art supplies, and school instructional materials. This holiday requires mandatory participation from retailers who sell the eligible merchandise and retailers are prohibited from collecting sales tax on these items.

The Arkansas Department of Finance and Administration has posted a guide for retailers regarding the holiday. To learn more about the holiday visit:

https://www.dfa.arkansas.gov/images/uploads/exciseTaxOffice/Sales_Tax_Holiday_Instructions_2022.pdf

 

What’s for Dinner? Sales for Resale Complexities

Determining whether a sale is for resale can be a complicated matter as one prominent restaurant has recently discovered. The restaurant claimed that its purchases of dishes, utensils, and glasses were not subject to sales tax since they were being “resold” to its customers with the price included in the term “meal”. However, ownership is never exchanged between the restaurant and the customer. The smallwares remain in the restaurant’s ownership since they are cleaned and reused when the customer leaves. The restaurant’s claim was properly denied.

 

How Can We Help?

Allyn’s tax team is staffed with seasoned tax professionals experienced in all aspects of Federal, multi-state and local tax compliance and consulting for large US and global corporations. We use that experience to your advantage.

Here at Allyn, we pride ourselves on our ability to always “stay on top of it”. We use the latest in tax software and create a unique, rigorous process for each and every client’s needs, ensuring that nothing slips through the cracks. Our team is equipped to assess in-advance and quickly resolve all tax issues that a business may encounter, allowing our clients to confidently focus on what they do best.

Allyn Tax offers a full scope of corporate tax services across North America, encompassing business tax compliance and consulting, audit defense and support, nexus reviews and registrations, exemption certificate management, overpayment reviews, and mail processing solutions.

Contact us and we can provide a customized cost-effective solution to meet your company’s needs. For further information on Allyn Tax services, please contact: tax@allynintl.com.

 

For More Information

If you are interested in learning more about this topic or other tax topics, please visit our Tax Publications under News & Publications at www.allynintl.com.


 

About Allyn International

Allyn International is dedicated to providing high quality, customer centric services and solutions for the global marketplace. Allyn's core products include transportation management, logistics sourcing, freight forwarding, supply chain consulting, tax management and global trade compliance. Allyn clients range from small local businesses to Fortune 500 firms. Allyn conducts business in more than 20 languages and has extensive experience in both developed and emerging markets. Highly trained experts are positioned throughout North and South America, Europe and Asia. Allyn’s regional headquarters are strategically located in Fort Myers, Florida, U.S.A., Shanghai, P.R. China, Prague, Czech Republic, and Dubai, U.A.E. For more information, visit www.allynintl.com.

 

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